American University International Law Review
Volume 8
Issue 2 Vol 8. #2/3 Winter/Spring 92/93
Article 8
1993
The Uses of Federalism
Robert A. Sedler
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Sedler, Robert A. "The Uses of Federalism." American University International Law Review 8 no. 2/3 (1993): 413-420.
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THE USES OF FEDERALISM
Robert A. Sedler"
In my response to Professor Howard's excellent paper,' I will focus
on the values that may be implemented by a federal system of government and relate those values to the American federal system that exists
today. It is not possible to look at the American federal system as it
exists today without understanding the historical and evolutionary factors
that brought about the particular form that this system takes. The American federal system was not planned. Analytically, it is an "accident of
history" that came about as a result of historical circumstance and gradual evolution. Rather, when constitutional planners in today's new nations study the American federal system as a model or source of ideas
for their own system, they must look at the American federal system
very carefully and understand precisely how that system came into being
and how it evolved into its present form. The form that the American
federal system takes today is the result of the interaction of three factors: (1) the American Revolution that transferred the sovereignty formerly exercised by Great Britain over domestic matters to the newlyindependent individual American states; (2) the Constitution of 1787 that
established a federal government and at the same time imposed certain
"national unity" type restrictions on the otherwise sovereign states; and
(3) the Supreme Court's constitutional interpretation of the nature of
federal and state power in such a way as to give rise to what may be
called the principle of concurrent federal-state power with latent federal
supremacy.
When the thirteen colonies declared their independence from Great
Britain in 1776, each colony became an independent and sovereign state
for constitutional purposes and succeeded to the sovereignty formerly
possessed by Great Britain over domestic matters. Thus, the American
federal system that exists today started out only with the states. This
means that in American constitutional theory succession is the source of
* ALB., 1956; J.D., 1959, University of Pittsburgh; Professor of Law, Wayne
State University.
1. See Dick Howard, The Uses of Federalism, 8 AMt UJ. INT'L L & POL'Y
389 (1993).
413
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state sovereignty over domestic matters, and American states do not
depend on the United States Constitution as the source of their power
over domestic matters. As a result, each state has its own system of law
and its own system of courts. The states can then exercise the panoply
of sovereign powers over domestic matters, such as the power to levy
taxes, the general criminal law power, and the general regulatory power.
The states are limited only to the extent that the federal Constitution
prohibits or restricts a particular exercise of state power.2
The federal Constitution came about in no small part in reaction to
the way that the states were exercising their sovereignty. The states were
discriminating against citizens of other states, imposing custom duties on
products from other states, and embargoing their own products. In general, they were trying to gain economic advantages for themselves over
the other states.? However, except for imposing some "national unity"
type restrictions, the Constitution did not deal with the excesses of state
sovereignty by significantly reducing the scope of state power. Rather,
the Constitution established a federal government with specific powers to
regulate domestic matters, and provided for federal supremacy in the
event of a conflict between the exercise of federal and state regulatory
2. See McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819) (comparing state
and federal sovereignty). The principle that the states possess the general sovereign
power over domestic matters except as prohibited or restricted by the federal Constitution is textually embodied in the Tenth Amendment, which states that "[t]he powers
not delegated to the United States by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively, or to the people." U.S. CONST. amend.
X. In this sense the Tenth Amendment reiterates the Constitution's description of the
relationship between national and state governments as it was expressed prior to the
amendment. United States v. Darby, 312 U.S. 100, 124 (1941).
The states, however, did not succeed to that aspect of the sovereignty formerly
exercised by Great Britain over foreign affairs. That aspect of sovereignty devolved
upon the "Union of States" that was waging the Revolutionary War and that eventually concluded the peace with Great Britain. Since sovereignty over foreign affairs
never belonged to the states, it is deemed in American constitutional theory to be inherent in the federal government that was subsequently established by the Constitution.
Thus, the federal government has the inherent power to conduct the foreign affairs of
the Nation, and as regards the constitutional allocation of federal and state power, the
foreign affairs power is an exclusive federal power. United States v. Curtiss-Wright
Export Corp., 299 U.S. 304, 315-18 (1936). See John E. Nowak & Ronald D. Rotunda, A Comment on the Creation and Resolution of a "Non-Problem": Dames &
Moore v. Regan, The Foreign Affairs Power and the Role of the Court, 29 U.C.L.A.
L. REV. 1129, 1146-50 (1982) (discussing the foreign affairs power).
3. See Guy v. Baltimore, 100 U.S. 434, 439-41 (1880) (describing state discrimination and economic protectionism).
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THE USES OF FEDERALISM
415
power.4
Nonetheless, only a few of the powers of the federal government,
such as the power over immigration and naturalization and the power to
coin money, are exclusive federal powers.' Thus, in the absence of a
conflict between federal power and state power, the states are generally
free to exercise their full sovereignty over domestic matters. Over the
years, the Supreme Court has interpreted the specified powers of the
federal government very broadly, so that today there is no activity, no
matter how "local," that cannot be reached by the federal government.'
Thus, the overriding principle of the American federal system is that the
states and the federal government have concurrent power over virtually
every domestic matter.
Latent federal supremacy exists in the sense that Congress can restrict
or prohibit a particular exercise of state power by federal preemption.
However, a strong respect for state sovereignty contributes to a reluctance on the part of Congress to preempt state regulation and, correspondingly, a reluctance on the part of the Court to find that Congress
intended to do so.7 Preemption will only be found where (1) Congress
4. The Supremacy Clause provides: "This Constitution, and the Laws of the
United States which shall be made in Pursuance thereof; and all Treaties made, or
which shall be made, under the Authority of the United States, shall be the supreme
Law of the Land; and the Judges in every State shall be bound thereby, any Thing
in the Constitution or Laws of any State to the Contrary notwithstanding." U.S.
CONST. art. VI. § 2.
5. In order for a power to be exclusively federal, it must affirmatively be grant-
ed to Congress. lt art. I, § 8. Additionally, it must either be expressly denied to the
states in article I, section 10, or be of such a nature that the exercise of that power
by the states would be incompatible with its exercise by Congress. U.S. COxsT. art.
I, §§ 8, 10.
6. The broad interpretation of the specific powers of the federal government has
been most prominent with respect to the power of Congress over interstate and foreign commerce. For example, in one case, the Supreme Court held that when regulating wheat production in order to control wheat prices, Congress could prohibit a
farmer from feeding wheat that he grew on his own farm to his livestock. Wickard
v. Filbum, 317 U.S. 111 (1942). Because wheat grown on a large number of farms
for livestock feed could have a nationwide effect on wheat prices, Congress, in the
exercise of the commerce power, can require that a farmer not grow wheat on his
land and buy his wheat at market instead. Id.; see also Hodel v. Virginia Surface
Nfining and Reclamation Association, 452 U.S. 264 (1981) (upholding Congress' exercise of the commerce power to regulate local surface coal mining); LAURENCE H.
TRIBE, AMERICAN CONSTITUTIONAL LAW §5-4 (2d ed. 1988) (discussing the power of
Congress to regulate interstate commerce under the Constitution).
7. See Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev.
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[VOL. 8:413
has expressly preempted certain kinds of state regulation in the text of
the federal law,' (2) an exercise of state power directly conflicts with
an exercise of federal power,' and (3) in limited circumstances where
Congress has impliedly intended to "occupy the field," so as to leave no
room for any state regulation." Thus, federal regulation rarely preempts
state regulation. Accordingly, the principle of concurrent power remains
operative. Just as the federal government can exercise its power
throughout the United States, each state can exercise considerable power
within the boundaries of that state. Because the American federal system
is comprised of two sets of sovereigns with concurrent powers, there is
a great deal of overlapping regulation.
The constitution responded to the excesses of state sovereignty during
Comm'n, 461 U.S. 190, 206 (1983) (stating that the presumption is against preemption). The Court assumes that, absent clear Congressional intent to the contrary, state
police powers are not to be superseded by federal law. Id.
8. Congress has established a standard of preemption in the text of the federal
law which the courts must apply to determine whether a particular state regulation
has been preempted by federal law. See, e.g., Cipollone v. Liggett Group, Inc., 112
S. Ct. 2608 (1992) (evaluating state powers in light of a federal law concerning cigarette labelling and packaging). The Supreme Court applied the preemption standard
and held that the federal law preempted some state law tort claims, such as one
based on a failure to adequately warn of the dangers of smoking, but not others,
such as one based on intentional fraud and misrepresentation. Id.
If Congress expressly disclaims any intention to preempt by including a
"savings clause" in the federal law, state laws on the subject that are not inconsistent
are not preempted. Federal civil rights laws dealing with discrimination in public
accommodations, employment, education, and housing are examples of such laws.
9. See Hisquierdo v. Hisquierdo, 439 U.S. 742 (1979) (holding that where a
federal law providing retirement benefits explicitly stated that the benefits provided
under it would not be subject to legal attachment, a state could not apply its marital
property law to require that a share of these benefits go to the other spouse upon
divorce).
10. See, e.g., Hines v. Davidowitz, 312 U.S. 52 (1941) (holding that federal law
dealing with the registration of aliens preempts all state alien registration laws). "Occupying the field" preemption can occur when state regulation affects an area in
which the federal interest is dominant. Id. This type of preemption also occurs when
both the character and goal of the law are federal in nature. Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). The Supreme Court has held, for example,
that although the comprehensive federal regulation of nuclear energy preempts all state
nuclear safety regulation, it does not preempt the states from regulating the economic
aspects of nuclear power. Pacific Gas & Electric Co., 461 U.S. at 222. The Court
has further held that states are not preempted from allowing tort recovery of compensatory and punitive damages for the harm caused by the escape of hazardous nuclear
energy materials. Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984).
1993]
THE USES OF FEDERALISM
417
the pre-Constitution first by using the Privileges and Immunities
Clause" to impose certain restrictions on state power. 2 Additionally,
the Full Faith and Credit Clause'3 requires that the states recognize
court judgments and other legal acts of sister states." The Supreme
Court has also found that the negative aspect of Congress' constitutionally granted power to regulate interstate commerce prohibits the states
from discriminating against interstate commerce in favor of local commerce."5 Finally, in light of the "national unity" that the American federal system was designed to establish, the Supreme Court has held that
all Americans have the constitutional right to move freely from state to
state and to take up residence in any state.'
Thus, the evolution of the attributes of the American federal system
11. U.S. CONST. art. IV, § 2, cl. 1. The privileges and immunities clause states
that "the citizens of each state shall be entitled to all Privileges and Immunities of
the Citizens of the several States." Id
12. See Hicklin v. Orbeck, 437 U.S. 518 (1978) (holding that a state law requiring private employers to give preference to state residents in employment in all oil
and gas operations somehow connected to state-owned oil and gas violates the privileges and immunities clause); Austin v. New Hampshire. 420 U.S. 656 (1975) (disallowing a commuter tax applicable only to non-residents); Supreme Court of New
Hampshire v. Piper, 470 U.S. 274 (1985) (holding that a prohibition against the admission of non-residents to the practice of law in the state violated the privileges and
immunities clause).
13. U.S. CONST. art. IV, § 1. The full faith and credit clause provides that "Full
Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." Id.
14. Fauntleroy v. Lum, 210 U.S. 230 (1908).
15. See generally Robert A. Sedler, The Negative Commerce Clause as a Restriction on State Regulation and Taxation: An Analysis in Ternis of Constitutional
Structure, 31 WAYNE L. REV. 885 (1985) (noting that where the essential effect of
the regulation is to limit interstate in favor of local interests, the regulation violates
the Commerce Clause). To a limited degree, the negative aspect of the commerce
clause also precludes the states from enacting regulations that impose an "undue burden" on interstate commerce. Ld. However, since the source of this limitation on state
power is the affirmative power of Congress, this limitation does not run against Congress, and Congress can expressly authorize the states to enact laws that would otherwise violate the negative aspect of the commerce clause. Id. at 1000-02.
16. See Crandall v. Nevada, 73 U.S. (6 Wall.) 35 (1867) (invalidating the imposition of a head tax on the exit of all persons leaving the state); United States v.
Guest, 383 U.S. 745, 757 (1966) (stating that the right to travel between states is
fundamental); Edwards v. California, 314 U.S. 160 (1941) (invalidating a state law
prohibiting the entrance of indigent persons into the state); Shapiro v. Thompson, 394
U.S. 618 (1969) (striking down a one year waiting period to be eligible for welfare
benefits).
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can be summarized as follows: (1) the states and the federal government
have concurrent power over domestic matters, subject to latent federal
supremacy if Congress chooses to displace state power, which it is
reluctant to do; (2) the states generally cannot discriminate against citizens of other states or against interstate commerce; and (3) all Americans have the constitutional right to move freely from state to state and
to take up residence in any state.
I now want to relate these attributes of the American federal system
to the matter of the values of federalism, of which Professor Howard
has spoken. The American federal system advances at least three values
in this respect. These values may be somewhat different, at least in part,
from the values of federalism discussed by Professor Howard. These
values may be referred to as structural values, values that reflect the
effects of power allocation and exercise in the American federal system.
The first value is that of power-sharing and maximization of regulation. The federal government and states share power in almost equal
measure. States can regulate virtually everything in the domestic area
unless the federal government prohibits them from doing so. This power-sharing maximizes regulation because individuals and businesses are
subject to being regulated by both the states and the federal government.
By the same token, this power-sharing promotes experimentation by the
states. As Supreme Court Justice Louis Brandeis pointed out many years
ago: "it is one of the happy incidents of the federal system that a single
courageous State may, if its citizens choose, serve as a laboratory; and
try novel social and economic experiments without risk to the rest of
the country."' 7 One example of this experimentation today is medical
care. The United States does not yet have a federal system of universal
health coverage and large numbers of people simply do not have access
to medical care. Some states, however, are trying to set up state-operated systems that will provide health coverage for all of their residents. If
successful, this "experimentation" will provide the residents of those
states with health coverage even if the federal government is unwilling
to provide universal health coverage for all Americans.
It is precisely because the states have so much power that differing
state regulation can have a significant impact on the quality of life from
state to state. This raises the value of choice within a federal system.
17. New State Ice Co. v. Liebnann, 285 U.S. 262, 311 (1932) (Brandeis, J. dissenting). That decision, which held unconstitutional a particular state economic regulation, has subsequently been effectively overruled. North Dakota State Bd. of Pharmacy
v. Snyder's Drug Stores, Inc., 414 U.S. 156 (1973).
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THE USES OF FEDERALISM
419
This value ties in with the problem of inequality within a federal system, of which Professor Howard has spoken. However, this inequality
results from different policy choices made by different state governments, all of whom have been democratically elected. As a result of
these differences, to use the above example, in some states people will
be guaranteed access to adequate medical care, while in most states they
will not. Likewise, welfare and social insurance benefits differ widely
from state to state. Some states regulate businesses extensively while
others do not. So too, the level and nature of taxation differs significantly from state to state. All of these differences do bring about a degree
of inequality within a federal system, but they also serve to implement
the value of choice within a federal system. Again, people have the
absolute right to leave one state and take up residence in another state.
To the extent that differing state regulation can affect the quality of life
within the different states, people make choices about the quality of
their lives by deciding where they will live."
My home state of Michigan, for example, is supposedly an "antibusiness" state. Labor unions are strong, business is highly regulated,
welfare and social insurance benefits are relatively high, and so are
taxes. Correspondingly, Michigan has a good educational system and a
skilled work force. There is a purported concern that new businesses
will not locate in Michigan and that established businesses will leave for
states that are considered "pro-business," namely those where business is
less regulated, business taxes, workers' compensation and unemployment
benefits are lower, and where labor unions are weaker. Michigan's
economy has revolved in large part around manufacturing jobs in the
automobile and related industries, where wages and benefits are relatively high. Michigan's unemployment rate has traditionally been higher
than most states, but those who are working receive good wages and
"fringe benefits," and unemployment and welfare benefits are better than
in many other states. Thus, there are "trade-offs" in Michigan, and individuals and businesses can make choices in light of those "trade-offs."
The American federal system produces inequalities, but at the same
time implements a value of choice. People can choose to live in one
state or another with reference to quality of life concerns that are affected by the way that a particular state exercises its sovereignty. Thus,
choice is a very important value that is implemented by the American
18. Experience indicates that significant numbers of poor people also manage
somehow to move from one state to another, in the hope of bettering their situation
in life.
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[VoL. 8:413
federal system.
A third value that the American federal system implements is the
value of national consensus. Because of the principle of latent federal
supremacy, whenever there is a national consensus on an important
question of public policy, that national consensus, as reflected in the
enactment of a federal law, will control. This is a constitutional political
consensus, which simply means that there is a measure of agreement
between Congress and the President on an important question of public
policy. 9 The possibility of the federal government acting in response to
a national consensus is in a sense a safety valve, which enables the
people of the United States to decide collectively that a given matter involves a sufficient national concern so as to require a national solution.
Perhaps the best illustration of such a national consensus is the federal Civil Rights Act, which prohibits racial and other forms of group
discrimination in employment, education, public accommodations and
housing.' When Congress enacted the Civil Rights Act in 1964, some
states had enacted anti-discrimination laws, but a number of states, especially the states in the South, which had a long history of racial discrimination, had not. The result of the Act was a national commitment
to the principle of equality for racial minorities and other traditionally
victimized groups in American society.
These three values, power sharing, choice, and national consensus are
implemented most strongly by the American federal system as it has
developed and evolved over the years. Through these values, the American federal system as it exists today, may be able to provide some
guidance for the emerging new nation of South Africa.
19. Robert A. Sedler, Review Essay, Employment Equality, Affirmative Action, and
the Constitutional Political Consensus, 90 MICH. L. Rnv. 1315, 1321-23 (1992). Congress and the President are the political branches of the federal government, because
they are electorally accountable, and the consensus is a constitutional one because the
Constitution envisages legislation and the creation of federal policy as primarily a
collaborative and cooperative effort between Congress and the President. Id. Our system of representative democracy looks to the actions taken by the political branches
to determine popular will and the constitutional assumption is that the actions of these
branches do represent the popular will, regardless of whether these actions in fact reflect the wishes of a majority of the electorate. Id.
20. 42 U.S.C. §§ 2000 et seq. (1988 & Supp. II 1990).